BETTING ON HITLER – THE VALUE OF POLITICAL CONNECTIONS IN NAZI GERMANY*
Thomas Ferguson and Hans-Joachim Voth
This paper examines the incentives of private sector firms to undermine stable institutions and democracy in one of history's most celebrated cases – the Nazi seizure of power. We offer new evidence on the size and value of connections between German industry and Hitler's movement, drawing on previously unused contemporary data sources about supervisory board composition and stock returns on the Berlin Bourse.
One out of seven firms, and a large proportion of the biggest companies, had substantive links with the NSDAP. Crucially, our results show that helping to undermine democracy at important junctures produced high returns. While the market as a whole rose after Hitler's accession to power, connected firms outperformed by 5 to 8 percent between January and March 1933.
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